A PANDEMIC TOY STORY
Chess sets, Paw Patrol and stuck-at-home parents who keep spending
Ronnen Harary, co-founder of Spin Master Ltd., the Toronto-based children's toy-making entertainment juggernaut famous the world over for its Paw Patrol franchise, blocks off 20 minutes each morning, and another 20 minutes at day's end, to meditate.
The soft-spoken, thoughtful, 49-year-old self-made billionaire adopted the mind-centring practice some years back after taking a course in Toronto and spending time at the esteemed Esalen Institute in Big Sur, Calif., an alternative education mecca with hippie-era roots and several notable alumni, including Aldous Huxley and Joni Mitchell.
Meditation, Harary said, gives him the ability to “reset,” to process his dreams and, after a long day, rinse away any stressors, so that he can enjoy a “free flowing evening.”
But even in the quiet centre of his meditative mind, the toy visionary could not have foreseen the coming of The Queen's Gambit, the Netflix series that tells the story of a female chess prodigy. Since it first aired in late October, chess set sales have boomed and, wouldn't you know it, the Paw Patrol guy's company just so happens to own Cardinal Games Ltd., one of the oldest makers of puzzles and chess sets in the United States.
“You want to be in on the zeitgeist,” Harary deadpans.
Jokes aside, generating a hit toy or children's TV show, or deciding to add a maker of chess sets to the company fold is part art, part science and part “good luck.”
Toss in a pandemic, however, and that magic formula, not to mention the way things typically work, gets tossed out the window entirely.
COVID-19 may have closed stores and pushed back release dates for toy-promoting kids' movies, but it also unleashed parents on a holiday-scale shopping binge that has lasted for months.
“I don't want to make it sound like the toy industry is benefiting from the pandemic,” Joan Ramsay, a toy industry analyst at The NPD Group, said. “But the toy industry is benefiting from the pandemic.”
Stuck at home with their kids, moms and dads everywhere started spending their brains out as a coping mechanism, purchasing puzzles, chess sets — on that front, Spin Master sales are up 250 per cent for November — backyard trampolines, computer games and, yes, Paw Patrol baubles such as the Dino Rescue Dino Patroller (think: puppies plus dinosaurs).
Toy industry sales for the year are currently up 15 per cent from 2019, and 40 per cent year over year for October, according to NPD.
Now it is December, long regarded as the big game among toy makers. Have a bad December, the rule goes, and you have had a bad year.
With the virus, however, each successive month has been a game unto itself, and the games have all been going into triple overtime as fans keep hollering for their parents to buy more.
“The only thing that is going to slow things down is when some of the manufacturers start running out of products,” Ramsay said. “If there is something you are looking for, you had better go get it now.”
The great pandemic toy rush boosted Spin Master's third-quarter revenue in its arts and crafts, board games, puzzles and stuffed animals division to US$172.5 million, a 13.2 per cent year-over-year increase, while total revenue increased 4.3 per cent to US$571.6 million.
Much like time itself, the toy industry typically ticks along, year to year, without any huge swings in sales growth or declines. Sometimes, a hot new toy, say, a 21st-century equivalent to the Cabbage Patch doll, appears on the scene. Even when it does, there's still the same number of kids and birthdays, and there is only one Christmas.
Then along came COVID-19, and people started snapping up puzzles, for example, in April, a historically slow time for puzzles. But they didn't want just any old puzzle. The demand among shoppers was for ever-larger puzzles, some consisting of 2,000 pieces and more.
But not everything is selling like mad, Harary said.
With stores closed, some impulse purchases — such as parents buying whatever is at hand to pacify a restless youngster — are not happening.
What has emerged, Ramsay at NPD notes, is a pattern where shoppers are chasing bigger-ticket items. They don't want the small LEGO kit. They want the kit that costs $100-plus.
Another pandemic curiosity has been the absence of new movie releases to drive sales.
Since the days of yore, and, for current purposes, considering Harary was born in 1971, let's call those days the '70s, there has been a correlation between what kids watch on the big screen and what they ask Santa to bring them.
For example, Luke Skywalker blew up the Death Star in 1977. Over the next eight years, toy giant Kenner reportedly sold more than 300 million Star Wars action figures.
Paw Patrol, the movie, isn't due out until next summer. But the animated television hit is well embedded in wee kid culture and omnipresent as an after-school home-viewing option, which can't hurt Spin Master's bottom line. (One six-year-old boy consulted for this article identified “Chase's 5-in-1 Ultimate Police Cruiser,” which retails for about $100, as the ideal gift).
Harary does not have kids, although he pegs his age, at least in spirit, at “seven.” His favourite Paw Patrol pup is “Rocky,” the mutt, and a character modelled upon him, as a South African-born and Canadian-raised child of Israeli immigrants.
He lives alone in a downtown Toronto neighbourhood known as Little Italy. Along with meditation, he practises yoga and rides his Peloton, occasionally during Zoom meetings, since he does his best thinking while in motion.
Spin Master recently paid $50 million for Rubik's Brand Ltd, owner of the Rubik's Cube, that almighty icon of the puzzle world. The deal officially closes Jan. 4.
Naturally, Harary has been refining his cube-solving skills, and admits that he was one of those kids — and you know who you are — that had to take the cube apart and put it back together again in order to solve it.
No matter. As the cube's soon-tobe new owner, he has already met with and subsequently scheduled a private puzzle-solving tutorial with Erno Rubik, its inventor.
“Erno is a real intellectual,” Harary said.
Chances are, he plays chess, too.